Miners, banks drag FTSE down, breaking 4-day rally

By IBT Staff Reporter On 11/17/09 AT 7:50 AM

Britain's top share index was 0.5 percent lower in mid-session trade on Tuesday as investors paused for breath after a four-day winning streak, with falls in banks and miners offsetting gains in some defensive issues.

By 1212 GMT the FTSE 100 .FTSE index was 27.40 points lower at 5,355.27, after the index hit a 14-month closing high the previous session.

The blue chip index is up 20.7 percent this year and has surged 55 percent from a six-year low hit in March.

We are in a trading range between 5,200 and 5,375 and we're going to give very little ground away in the next 6 weeks. We will probably be volatile, responding to economic and corporate news on a daily basis, said David Buik, senior partner at BGC Partners.

Miners were under pressure from lower metal prices as the U.S. dollar rebounded on Tuesday from Monday's 15-month lows after Federal Reserve Chairman Ben Bernanke made rare comments about the value of the currency.

Any major correction will be foreign-exchange driven. If the dollar were for technical reasons to rally then we could see a five or seven percent pull-back for equities over the period of a week, Buik added.

Banks were also weaker as investor appetite for risk diminished slightly and prominent U.S. analyst Meredith Whitney made bearish comments about the sector.

Among individual issues, Intertek (ITRK.L) slid 3.3 percent after Seymour Pierce cut its rating to outperform from buy after the equipment testing firm posted revenue growth of 28 percent for the 10 months to October 31.

Centrica (CNA.L) added 1.5 percent as British gas prices recovered further following a decline last week, helped by a forecast showing weather may be less mild over coming weeks than previously expected.

ICAP (IAP.L), the world's biggest interdealer broker, rose 3.8 percent after reporting first-half results, with Numis upgrading the stock to hold from reduce as revenues beat its expectations, while profit fell just short of forecasts.

Cable & Wireless (CW.L) was up 2.7 percent after the telecoms group said it planned to raise around 200 million pounds via the bond market as part of a refinancing to push through a demerger by April next year.

On the economic front, Britain's inflation rate accelerated in October as expected, after a sharp fall in transport costs last year was not repeated, official data showed.

At 1330 GMT U.S. figures on producer price inflation and industrial production will be a focus for investors.

A white Fiat van rammed into pedestrians outside enjoying a late afternoon stroll on Las Ramblas in Barcelona on Thursday killing at least 13 people and leaving hundreds injured. The Islamic State group claimed responsibility for the attack.